MTN Nigeria revenue rises by 21.4% in 9 months despite Naira fall, MoMo active wallets hit 3.6 million

Godfrey Elimian
As MTN’s 5G reaches 1.8million users, MoMo PSB’s users rise by 53.1% YoY, reaching 3.6 million users
MTN Nigeria proposes a merger of MoMo PSB, Yello Digital Finance Services to form one 'super' finance platform

MTN Nigeria (MTN NG) Communications Plc has reported a 21.4% surge in revenue for the first nine months of 2023, defying economic challenges posed by the devaluation of the naira and Nigeria’s rising inflation. Notably, the company has not only managed to withstand headwinds but has also maintained its lead and growth as Nigeria’s leading network provider by market share, adding 2 million subscribers during this period.

According to its financial results for the nine months ending September 30, 2023, the company’s operations resulted in exceptional growth in the period. This was despite significant macroeconomic hurdles which saw Nigeria’s inflation rise to 26.7% in September 2023, representing the ninth consecutive month-on-month increase in 2023. The inflation rate recorded a YTD (Year-to-date) average of 23.3 per cent and saw the naira depreciate to a record low of ₦755/$.

Per the report, the company’s total revenue soared to ₦1,772,949 million, representing an impressive growth rate of 21.4% compared to the same period in 2022. The core service revenue was a key driver, reaching ₦1,762,858 million.

Karl Toriola, MTN Nigeria CEO
Karl Toriola, MTN Nigeria CEO

“The operating conditions in the first nine months of 2023 remained tough. This was in line with expectations following the removal of the fuel subsidy, the currency devaluation due to the liberalisation of foreign exchange (forex) management and the impact of the 2023 Finance Act. In the near term, consumer spending power has been diminished by the upward pressure on overall inflation. This was exacerbated by ongoing volatility in the global macroeconomic and geopolitical environment.”

Karl Toriola, MTN Nigeria CEO

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1.8 million 5G customers, MoMo users rise by 53%

A closer look at the figures reveals a diversified revenue portfolio, indicating that MTN Nigeria has successfully tailored its services to meet the changing demands of its customer base. Notably, the company recorded double-digit growth of 10.6% in its voice propositions, reflecting the importance of this traditional service.

The remarkable 36.4% surge in data revenue is noteworthy, as it indicates an increase in data usage and the conversion of both new and existing subscribers. The growth was made possible by the expansion of data bundles, an increase in smartphone penetration, and network investments aimed at expanding coverage and enhancing the customer experience.


Network Expansion and 5G Adoption

An essential part of MTN Nigeria’s strategy includes enhancing its network infrastructure. The company’s 4G network now covers 80.5% of the population, a notable increase from 79.1% in December 2022. This growth has driven a 46.3% surge in data traffic, with 4G networks accounting for 83.7% of total data traffic.

Furthermore, the company’s 5G network is on track to achieve a 10% coverage target by the end of the year. The rollout of 5G has played a pivotal role in increasing home broadband users, growing to 1.8 million during the period under review.

MoMo PSB witnessed YoY growth

While facing some headwinds in fintech services, MTN Nigeria demonstrated a 5.6% increase in fintech revenue. This achievement is noteworthy given the 20.4% YoY decline in fintech subscribers.

A closer examination reveals a 27.2% QoQ growth in active fintech users, illustrating the company’s resilience and recovery efforts in the over-the-top (OTC) platform following cash shortages earlier in the year. The rise in mobile money (MoMo) users and the strong performance of MoMo PSB wallets reinforce MTN Nigeria’s continued fintech leadership.

As per the report, MTN’s MoMo PSB active wallets witnessed a rise of 53.1% YoY and 15% QoQ, reaching 3.6 million users, which accounts for 40.6% of its fintech user base. The number of registered MoMo users has also increased to 27.9 million. Additionally, the transaction volume of MTN has experienced 47.6% YoY growth, indicating a positive trend in the ecosystem.

“We now have over 293k MoMo agents, up 55.7% YoY, bringing our services closer to our customers and 197k merchants since we started building our merchant ecosystem in March 2023.”

Digital Expansion

MTN Nigeria’s digital services have seen rapid adoption, with digital revenue growing by a staggering 55.4%. The active user base for digital products increased by 67% to 16.1 million. The growth was fueled by expanded digital offerings and optimized customer journey experiences. Ayoba, MTN’s instant messaging platform, has also gained traction, with over 2.8 million new users added, bringing the active user count to approximately 8 million.

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Other MTN businesses thrive

The enterprise business segment, which caters to communication and ICT needs for businesses in Nigeria, witnessed a remarkable 43.8% growth in service revenue. Mobile and fixed connectivity services emerged as the main revenue drivers, reflecting the increasing demand for business solutions.

While the company navigated various challenges, such as currency devaluation, higher costs due to the devaluation, and VAT on tower leases, it achieved remarkable earnings before interest, taxes, depreciation, and amortisation (EBITDA) growth.

EBITDA increased by 16.3%, reaching ₦907,927 million. Despite a decline in the EBITDA margin, which fell by 2.4 percentage points to 51.2%, the company maintained strong profitability.

Despite the challenges posed by the economic environment, MTN Nigeria’s financial position remains robust. The company boasts a balanced debt structure, and its financial metrics remain well within all financial covenants. The company’s disciplined approach to capital allocation allows it to meet operational, financial, and investment obligations while continuing to provide dividends to shareholders in line with its policy.

Future Outlook

MTN Nigeria expects to face continued challenges due to several factors, including the removal of fuel subsidies, foreign exchange policies, the 2023 Finance Act, and global economic and geopolitical uncertainties. Despite these challenges, the company remains committed to building resilience and promoting growth. This, it says, will be achieved through network expansion, acceleration of the MoMo PSB platform, and improving operational efficiency.

In the fourth quarter of 2023, the company plans to roll out Capex to achieve 83% 4G and 10% 5G population coverage. Additionally, the company will leverage additional spectrum to enhance network capacity, which is expected to support sustained growth in data traffic.

As MTN Nigeria continues to invest in strengthening its commercial operations and scaling fintech services, it remains committed to expense efficiencies and disciplined capital allocation. The company will also engage with regulatory authorities to address tariff increases, thereby supporting the industry’s long-term sustainability.

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